15 August 2006

How Utterly Unconvincing

Today, DPM Wong Kan Seng is in the Straits Times. The ST focused on the terrorism angle, but also reported, in an incidental sort of way, DPM's remarks about job seekers rejecting offers.
ST Aug 15, 2006
Security won't help if people take it easy: DPM
By Zakir Hussain

NO AMOUNT of security measures will be adequate against the threat of terrorism if people are complacent about their role, Deputy Prime Minister Wong Kan Seng said last night.

In his assessment of the security situation here after last week's foiled bomb plot in Britain, he said security is a priority and everyone has a role to preserve safety and stability.

He was responding to questions from reporters ahead of a speech at the 25th anniversary of the National Transport Workers Union (NTWU), where his message to job seekers was not to be choosy despite the improved job situation.

........ [comments about terrorist concerns deleted]

In remarks to more than 1,000 dinner guests, he advised job seekers to give serious thought before turning down jobs.

'A few hundred dollars is still better than zero,' he said.

Given the opportunities elsewhere, firms that cannot find enough workers here will move, he added.

Should that happen, even those who are now employed will lose their jobs.
It's quite amazing to see how highly orchestrated MSM reporting sometimes seems to be. Yesterday we had an ST article (see preceding post) urging young graduates to be content with menial jobs. Today, Wong Kan Seng advises job seekers to give serious thought before turning down jobs and tells them that "a few hundred dollars is still better than zero." Note also his comment that if firms cannot find enough workers here, they will move away.

And last week, in case you did not notice, the Straits Times reported that 3,500 workers at Maxtor Corporation are going to be retrenched:
ST Aug 11, 2006
3,500 workers to lose jobs as Maxtor shuts down

By Grace Ng

ABOUT 3,500 workers at Maxtor Corp's local plants had their worst fears confirmed yesterday when the firm's parent company said it will close the entire operation here by the New Year.

The announcement by Seagate Technology was expected by Maxtor staff, who have witnessed a series of layoffs at the disk-drive plants over the past 18 months.

The job cuts, affecting everyone from the factory floor to the executive suites, will sever Maxtor's 26-year link with Singapore.
... and that the Singapore government had pledged to help them.

ST Aug 11, 2006
Govt and unions set to help retrenched staff
Job-matching and counselling for retrenched workers; those laid off will get compensation
By Aaron Low &Gabriel Chen

THE Government and the unions are ready to help 3,500 or so of Maxtor Corp workers set to lose their jobs by the end of the year.

The Ministry of Manpower (MOM) and the National Trades Union Congress (NTUC) yesterday pledged to help the retrenched staff find new jobs and get counselling over the plant closures.

This follows the announcement by Seagate Technology yesterday that it will shut all three Maxtor plants here.
Call me a cynical conspiracy theorist, but I can almost see it happening already. The Maxtor employees will be retrenched. The government will try to help them find new jobs, but will fail for a large proportion of them. In the end, the government can only get them menial jobs which pay "a few hundred dollars". Obviously they'll turn these down because a few hundred dollars a month will barely cover their transport expenses to go to work.

However, the government will then reiterate Wong Kan Seng's statement that "a few hundred dollars is still better than zero". Next the government will say that in the first place, it's because you Singaporean workers are so fussy that companies like Maxtor can't find workers here and are therefore closing down. If only you fusspot citizens would accept menial jobs, none of this would have occurred!

Of course the truth is that Maxtor is closing down in Singapore because the hard-disk manufacturing industry is one of those areas where we've simply lost out to low-cost China.

And going back to Wong Kan Seng's speech .... frankly, it's just absurd to urge a job seeker to accept an offer because by doing so, he would stop factories from closing down and save his fellow citizens from unemployment. Apart from the point just being delusional, it's also terrible salesmanship by DPM Wong. It's like an insurance agent telling you to buy life insurance so that your monthly premiums will help others who do die young.

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utwt said...
This comment has been removed by a blog administrator.
utwt said...

yes, and i think this is not an isolated case. the withdrawal of foreign investment appears to be systemic

Anthony said...

Wong Kan Seng's statement is true ONLY if the cost of working is higher than the pay.

That's not necessarily true. A few hundred dollars a month might not be enough to pay for the increase in food prices for working in town as opposed to, say, cooking your own food. There's also transport costs to consider. At a few hundred dollars a month, you might end up with a nett negative income by choosing to work, depending on the circumstances.

There's also the fact that WKS is NOT putting a value to leisure time. The statement kind of presumes that a few hundred dollars a month is sufficient compensation for losing all that free time.

In short, WKS is saying (i) your free time is valueless or near-valueless and (ii) that you should be a nice cog in the economic machine dammit and (iii) you might have to actually TAKE a loss to contribute.

Anonymous said...

I can't fault WKS's logic that few hundred dollars is better than nothing, that's certainly true. But it's not quite enough.

"a few hundred dollars a month will barely cover their transport expenses to go to work". That's typically exaggerated by Mr Wang to highlight the valid point that living expenses are high in Singapore.

The mentality that Singaporeans are fussy jobseekers is engrained in the government, not just WKS. Sometimes I sympathise with them because if you were in the government's shoes, how would you solve the unemployment issue?

The fact of the matter is they won't be able to solve it, unless they are prepared to relook some long-standing policy sacred cows.

Some of you might disgree, but I would suggest a minimum wage, and a "hire Singaporeans first" policy. The government is excessively pro-business, and workers have completely lost their rights and voices (NTUC doesn't count).

Gilbert Koh aka Mr Wang said...

In a previous post, I have demonstrated that many of Singapore's bottom 20% wage earners earn less than the average Filipina maid in Singapore (after you take into account the fact that the Filipina maid does not need to travel to work; and that her employer pays for her accommodation, food, water and electricity consumption and medical expenses).

Anonymous said...

For a guy who makes more in 1 month than what most of these workers will make in 10 years to make a comment like this is a joke.

How about our ministers lead by example- afterall taking home $10,000 every month is also better than zero, but why do they insist on a monthly 6 figure paycheck? On top of everything else, they still have the cheek to send their sons on government scholarships why they could easily afford the tuition and living expenses.

Anonymous said...

A few hundred dollars a month in Singapore, and WKS expects them to survive. I just don't understand. It is time for the PAP to stop boasting how prosperous our nation is. Malaysians are so much better than us now.

Anonymous said...

how about keeping costs of essentials down, mr wong? like bus/mrt fares.

i think that would help a lot more, especially for the low wage workers.

Anonymous said...

How about keeping land cost down? Investors can afford to pay workers more and still stay competitive more if they don't have to pay high rentals. Or is that too much a sacrifice to ask of the multi-property owning elite, including our Ministers and top policy makers?

On a related note, in the latest issue of the Law Gazette, MM Lee found his 9 years legal practice unenjoyable because he was selling his skills for a living; whether his client was in the right or wrong did not matter. "I had remained a lawyer, it would have been a meaningless existence... I found it an unfulfilling profession". So what about the rest of Singaporeans who sell their skills for a living and are not in a position to care whether their customer or boss is right or wrong, and are trained and retrained for the privilege to remain meaningless digits in Singapore Inc to enrich the economic elite, to be discarded at a moment's notice? How fulfilling is it for them?

Anonymous said...

hmmmm I don't know much but isn't the union suppose to fight for workers. Why is the minister telling union to accept a few hundred dollars wages. Seems like the government is saying, too bad for you guys. This is the reality of life. The government cannot look out for you in this competitive world or companies would start moving out of singapore. You better just pick up the scraps and eat them instead of complaining about low pay. It is better than starving like a ethiopian.

Anonymous said...

WKS is right...few hundred dollars a month is sufficient if we talk about food n standard tpt expenses...but here's where the iron cage system works, the 25-year-loans for grossly inflated HDB flats...one starts work at 25, and spends the next half of one's life paying off the installments for flats.

As for leisure time - since one cannot affix any monetary or quantify those hours in measurable specifics - it is deemed as irrelevant.

le radical galoisien said...

Singaporeas lack collective power to counteract against government forces. Perhaps this is something that can be changed as technology progresses.

PC said...

WKS's comment that "a few hundred dollars is better than zero" is not unlike what the construction companies did when things became difficult for them...

While this IS a generalization, one would have to take a look at one's fixed costs first.. rental / mortgage costs, minimal level of food for subsistence, etc.. let's put this figure at S$500. Let's say one is offered a job of S$800 (for convenience, let's assume this is net of CPF). Assuming that the company provides free transport to work and one can pack food from home for lunch, the net benefit is S$300... which is the "logical" choice...

However, if one has to spend excessively in order to do this job, say the job is located in the far corners of Singapore and the only way one is to get there is to either cab or drive there, then the variable costs are substantially higher, bringing a net loss to the whole transaction. Then it does not make sense for one to take up the job.

If we were to take a close look at what WKS was saying, he WAS generalizing... and the assumptions are a bit sweeping... (i know i know.. that last bit was an oxymoron)

Anthony :

When one is in need of money / work, one generally puts leisure at the lowest priority.. Maslow's Hierachy of Needs is at play here.

Anonymous said...

Forget Maslow. I remember economic efficiency requires that inividuals undertake all activities that produce benefits that exceed their costs.

Whichever way you look at the problem, it is quite indicative of inefficiency or near-inefficiency.

Anonymous said...

From the point of view of a minister he thinks that few hundreds of dollars would be sufficient. However, there is a saying "do not comment on another's plight if you have not been in the other's shoes."

Being a minister with a 6 figure salary, he could easily spend the few hundreds of dollar on a meal in which he states that his follow man should accept as his monthly wage.

With the rising cost of living, loans on housing and education, the average singaporean needs more than a thousand dollars a month to survive.

By accepting these few hundreds, the singaporean may inccur more expenditure due to transport cost than they earn.

Moreover now they are charging an addition S$18 for each transaction using medisave, how could people afford health care?

Perhaps he should review his salary and take a few hundreds instead of the 6 figures which he draws now and redistribute this money to the people?

His statement is not logical on using these points of view.

His purpose is to prevent foreign investments to move to other countries. However, JTC's policies of requesting companies to upgrade their factory infrastructures every few years and their high rental are the another factor in which foreign investors will be detered from singapore.

My 2 cents worth.

Anonymous said...

That is the problem when you have high paying ministers who have simply no idea how difficult life is to be bottom 20% earners, hack not even the bottom 50%......I dare say bottom 75%!!!!! Damit!

PC said...

Just an observation. If we use the argument that ministers, by virtue of their high salaries, are unable to formulate policies because they don't know what we, the proliteriate, are going through, then the only way they would be able to do so is to pay themselves "a few hundred dollars".


le radical galoisien said...

And educational streaming ends up keeping the lower and upper classes apart in different schools, so they never interact.

One wonders if streaming's ridiculous elitism is not so much as for the efficient use of academic resources, but rather to put the masses down.

Singapore seems more dystopian the more we discover things about it. Did you know our Gini coefficient - (0.42) is higher than that of India's? (0.35) It measurs income inequality and the scale can be analogous to a logarithmic one.

le radical galoisien said...

How much income does the average MP earn? Is there a disparity between the opposition members' salaries and that of the average PAP member? (Not counting nominated members.)

Anonymous said...

This belief of our political masters that an unemployed person should accept any low-paying job that comes along is based on an economic fallacy.

For the government, one person less on the unemployment queue is of course good for our official employment figures, regardless what the job is.

Let's look at this in detail. A rational person would search for a job that best matches his skills, qualifications and very importantly, expectations. If the person is unemployed, he would live on his savings, his wife's income, or in some cases, rich parents' financial support, during the search process. No dole in Singapore's case naturally.

In fact, some economists would say that a longer job search is good as it increases the efficiency of the economy by matching the correct person to the correct job. In a highly counter-intuitive way, a dole system could actually be good for the economy if it affords unemployed people the time and resources to seach for a matching job. (Witness welfare-based but innovation-rich countries like Sweden and Finland).

Of course, the above assumes that there are sufficient matching jobs in the economy in the first place. What if there aren't and an unemployed person's savings are being reduced to zero? In such cases, taking on a low-paying job might actually deplete one's cash reerves even faster since there are often out-of-own-pocket expenses tied to the job.

I put forward that Singapore is exactly in this situation - hence stories of investment bankers driving taxis. And WKS is basically asking our unemployed to lower their overly high expectations.

Some radical solutions in my view are:
- Allow the long term unemployed to access their locked-up CPF savings (fat chance this would happen)
- No personal CPF contributions for those earning less than $1,000 (can be indexed to cost of living)
- All employment pass (EP) holders to pay CPF (currently they have a choice not to). This way, we equalise the take home pay of Singaporeans and EP holders. EP holders will then weigh carefully before taking up employment in Singapore.
- Employers must pay CPF for EP holders (again they have a choice not to) so as to equalise the costs of hiring Singaporeans and EP holders. But this will jack up overall labour costs for employers (that's why this won't be considered by our government).

John Maynard Keynes famously said: In the long run we are all dead. What he meant was don't even think of the long run if one can't even survive in the short run. This is especially true for the chronically unemployed.

Anonymous said...

Singapore cannot rely on labor-intensive manufacturing because of cheap labor in other countries. But entrepreneurial, creative industries will also struggle here, in spite of government sloganeering along the lines of making Singapore a "media hub". There is simply too much social and political repression. Those who are innovative enough, or intelligent enough to form companies, are also intelligent enough to leave Singapore.

As more manufacturing jobs are lost, how will we "remake Singapore"? Make it an education hub for the region? I don't think that is possible either. No one wants to study or teach without academic freedom. Even little-known Warwick University turned down Singapore.

Watch our country go down the toilet, because it's already happening. I think the Minister earns too much money to actually notice.

Mind My Wealth said...

They just don't care or have any real impact of getting people left out due to structural workforce changes to new jobs that provide a meaningful alternative. Asking a graduate-retrenched senior manager to take a fast-food outlet supervisor job ain't exactly helpful nor is it unreasonable for that person not to take the job.
One of you wrote, there may be a negative effect on your savings if you take a too-low paying job as your expenses may outweight the salary.
In countries like India, if you can't find a job in the large cities, you can go to a more rural city and cost of living is markedly lower. Here in our small red-dot, the costs are largely the same whether you live in Toa Payoh, Sengkang or Bukit Timah!
The fixed costs are still there...
Unions? forget it.. it's a co-op. Better known for their supermarkets than helping employees.

Anonymous said...

oh btw, i heard somewhere that the methodology used by the MOM experts in calculating no. of jobs created is a highly controversial and even ethical one. Not sure whether anyone can shed some light on it.

Another thought to ponder about: Man A used to earn $4,000 a month, but due to "job restructuring", he now earns $1,000 a month. At the same time, the company hires four other fellas, all earning $500 a month. On paper, the co. saves $1,000, no. of jobs increase from one to five, headline news in ST. Good news for all =)

Anonymous said...

oh btw, i heard somewhere that the methodology used by the MOM experts in calculating no. of jobs created is a highly controversial and even UNethical one. Not sure whether anyone can shed some light on it.

Another thought to ponder about: Man A used to earn $4,000 a month, but due to "job restructuring", he now earns $1,000 a month. At the same time, the company hires four other fellas, all earning $500 a month. On paper, the co. saves $1,000, no. of jobs increase from one to five, headline news in ST. Good news for all =)

Anonymous said...

Unions in Singapore should lobby for minimum wage. Most countries have this minimum wage law. If the PAP wants to continue their reign, it,s time they do a rethink.

Anonymous said...

Is it not wonderful that our MPs & Ministers just need to serve two terms and enjoy a fat pension forever. I remember the days when pensionable service assured you of at least a decent living after retirement. But such service has been completely eliminated for the poor folk but retained for the elite..makes me sick

Anonymous said...

Unions in Singapore are not created to lobby for anything, period. They are meant to be symbolic (like our speakers' corner).

locky2ky said...

maybe the good minister wants us to accept "few-hundred-dollar-jobs" so that the transport companies will have enough commuters to continue to prosper.

Anonymous said...

Why dont the minister do an experiment?

Try out the lifestyle of a bottom wage earner with 800 per month.

Lets say for a month?

Anonymous said...

Who is the problem? The government or the people?

If firms that cannot find enough workers here move away. What is stopping people who cannot find job here to move away?

Has the government made life so cushy that people simply refuse to move?

le radical galoisien said...

It's not just moving to a more comfortable lifestyle. There's cultural identity involved, mind you.

For one, I'm not very happy living in the US.

Gilbert Koh aka Mr Wang said...

I don't think other countries throw their arms open to foreigners the way Singapore does. That is the difficulty. It is not as easy for Singaporeans to emigrate somewhere and find a job; as it is for foreigners to come here and get a job.

Anonymous said...

if a man earns $500 a month, how much of that goes towards supporting the DPM and his pension?

Anonymous said...

a few thoughts on the Maxtor situation - is this what they call structural unemployment? well, if it is then look on the bright side, only advanced economies suffer from this. On the other hand, one could argue that we should have known this day would come - twenty years ago, hard drives were high tech. Now they are old news. Once EDB got Seagate in, they considered their job done. This will happen again - biotech could be old hat twenty years from now. More fundamentally, someone should consider very carefully if we cn justify supporting a manufacturing sector as a pillar of our economy? If we do away with this, a large part of the migrant labour issue goes away as well - we simply will not need immigrants from China and India who are here only because they are not able to go to America, Europe, Australia and NZ. Then we can also accept a lower population base, an aging population and a declining birth rate with much greater ease.

le radical galoisien said...

Well hard drives are still an integral part of society.

If you ask me, hard drives should even be more pertinent now than they were back then, when they were a novelty.

About years ago, the AK47 was considered high-tech. Now AK47s are old news, but they are military significant firearms.

Why should hard drives be any different? It's not just about what's "in" or anything. Hard drives are different from bubble tea (or dot-com companies) for that matter.

Of course, one has to find a specific application in biochemistry, not merely because "oh biomedical industry" is going to be a big thing.

Anonymous said...

It's not that hard drives are not needed any more. It's that it's much cheaper to manufacture them in China - think land & labour costs.

Anonymous said...

I am a almost 50 now and I have learned to automatically switch off whenever a miw speaks as I can never understanding what they are talking. To me, they speak with a language entirely foreign and alien to my native and layman language. Example, if SGD 600,000 annual salary is peanut, why is Minister Wong asking my fellow countrymen to accept few hundread dollars salaried jobs. I bet Minister Wong will never understand what can drive a person to throw himself against a moving train.

A Canadian friend once told me that his mother was making more money as a cashier in a supermarket than his brother working as an engineer; his mother was making C$20/hr (about C$3,500/month) and his brother was paid C$3,000/month.

Few hundred dollars, I would rather work for free and volunteer my time helping the less fortunate poor, the disabled, and the unemployed in my beloved country.

Anonymous said...

so much complains then why the f... did you guys vote them in?